Maersk Orders First Biofueled Megaships

By Costas Paris

Container ship giant A.P. Moller-Maersk A/S has ordered the first megaships powered by biofuels, as the industry moves to a new generation of vessels that will cut carbon dioxide emissions.

Maersk, the world's biggest boxship operator, is buying eight vessels from Korean yard Hyundai Heavy Industries Co. with an option to order another four. The ships will cost $160 million each, about 15% more than conventional vessels, said people familiar with the matter.

The new ships will run on biomethanol, which can be sourced from paper-mill waste and other byproducts, or by mixing hydrogen with carbon dioxide trapped from industrial exhaust systems. They also will have the option to run on conventional bunker fuel.

The ships, which will be delivered in 2024, will be able to move 16,000 containers each, a big step from the 2,000-box vessels that have been testing biofuels over the past couple of years. The company said it is looking at other fuels such as ammonia.

Oceangoing vessels collectively contribute around 2.5% of the world's greenhouse-gas emissions, according to the International Maritime Organization, the United Nations body regulating maritime affairs. The amount is comparable with the emissions of some of the largest European Union countries.

IMO member-nations have agreed on a plan to boost the fuel efficiency of some 60,000 oceangoing vessels by 40% over the next decade and cut overall greenhouse-gas emissions from ship exhausts by half in 2050, compared with 2008 levels. Some of the world's biggest ship financiers have pledged to only extend loans for ships built with lower emissions systems.

Maersk said the new tonnage will replace older vessels that are reaching the end of life and will be withdrawn from the company's fleet by 2024.

Clarkson Research Services Ltd. has estimated that it will cost the industry more than $3 trillion to switch to new forms of power. Producing enough carbon-neutral fuels and developing a global refueling network are two challenges.

"Sourcing an adequate amount of carbon neutral methanol from day one in service will be challenging, as it requires a significant production ramp up," Maersk said.

Maersk said more than half of its 200 customers are setting zero carbon targets for their supply chains. It said firms like Amazon.com Inc., Unilever Plc, Microsoft Corp., Procter & Gamble Co. and Puma SE are working to use zero carbon solutions for their ocean transport.

Write to Costas Paris at costas.paris@wsj.com

(END) Dow Jones Newswires

August 24, 2021 09:58 ET (13:58 GMT)

AP Moller Maersk AS (PK) (USOTC:AMKBY)
Historical Stock Chart
From Oct 2024 to Nov 2024